Buying a HomeTowne Studios by Red Roof franchise: SBA acquisition loan data
Since FY2018, SBA lenders have approved 13 7(a) loans to buy an existing HomeTowne Studios by Red Roof (classified mostly as Hotels (except Casino Hotels) and Motels), totaling $52.1M. The median loan was $4,520,000, 601% higher than the $645,250 median for all SBA-financed acquisitions. 7 of these loans were approved in the last two fiscal years.
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What this tells a buyer
- Price range to expect. Loan size tracks purchase price. Half of HomeTowne Studios by Red Roof resale loans landed between $2,975,000 and $5,000,000.
- Lender experience exists. GBank alone has financed 6 HomeTowne Studios by Red Roof resales.
- Guaranty. The SBA guaranteed 78% of the dollars lent here.
- What the file leaves out. The SBA file does not record franchisor transfer terms or fees.
Financing a HomeTowne Studios by Red Roof resale
The median SBA 7(a) loan for a HomeTowne Studios by Red Roof resale was $4,520,000 across 13 loans (FY2018 to FY2026). GBank, US Metro Bank and The Huntington National Bank have financed the most HomeTowne Studios by Red Roof resales. Too few of these loans are old enough to measure a charge-off rate; the average for all SBA acquisition loans is 3.5%.
HomeTowne Studios by Red Roof acquisition loans by year
| Fiscal year | Loans | Total approved | Median loan | |
|---|---|---|---|---|
| FY2018 | 0 | $0 | - | |
| FY2019 | 0 | $0 | - | |
| FY2020 | 0 | $0 | - | |
| FY2021 | 4 | $10M | $2,780,400 | |
| FY2022 | 0 | $0 | - | |
| FY2023 | 0 | $0 | - | |
| FY2024 | 2 | $8.4M | $4,202,500 | |
| FY2025 | 2 | $9.5M | $4,760,000 | |
| FY2026 | 5 | $24.2M | $5,000,000 |
How often do these acquisition loans fail?
Fewer than 20 HomeTowne Studios by Red Roof acquisition loans are old enough to measure losses reliably, so no charge-off rate is shown. The benchmark across all SBA acquisition loans in the FY2018 to FY2021 cohort is 3.5% by count. Non-acquisition 7(a) loans (every other stated purpose) approved FY2018 to FY2021 charged off at 6.2%.
"Charged off" is the SBA's final loss action on a defaulted loan after collection efforts. It lags default by a year or more, which is why only older cohorts are measured. It is not the same as a delinquency rate, and loans still outstanding can still fail. See charge-off in the glossary.
Terms signed in the LOI shape the purchase agreement that follows.
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Lenders financing HomeTowne Studios by Red Roof resales
| # | Lender | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | GBank | 6 | 46.2% | $25.7M | |
| 2 | US Metro Bank | 3 | 23.1% | $14.2M | |
| 3 | The Huntington National Bank | 2 | 15.4% | $5.8M | |
| 4 | Everwise Credit Union | 1 | 7.7% | $5M | |
| 5 | The MINT National Bank | 1 | 7.7% | $1.5M |
States where HomeTowne Studios by Red Roof units are bought
| # | State | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Colorado | 3 | 23.1% | $14.2M | |
| 2 | Texas | 2 | 15.4% | $10M | |
| 3 | Virginia | 1 | 7.7% | $5M | |
| 4 | North Carolina | 1 | 7.7% | $4.8M | |
| 5 | Michigan | 1 | 7.7% | $4.5M | |
| 6 | Illinois | 1 | 7.7% | $3.6M | |
| 7 | South Carolina | 1 | 7.7% | $3M | |
| 8 | Indiana | 1 | 7.7% | $2.8M | |
| 9 | Pennsylvania | 1 | 7.7% | $2.8M | |
| 10 | Florida | 1 | 7.7% | $1.5M |
Terms signed in the LOI shape the purchase agreement that follows.
Request Engagement AssessmentFree consultation. All 50 states.
Questions buyers ask
How much do buyers borrow to buy a HomeTowne Studios by Red Roof franchise?
The median SBA 7(a) loan for a HomeTowne Studios by Red Roof resale was $4,520,000 across 13 loans (FY2018 to FY2026). The middle half of loans ran from $2,975,000 to $5,000,000. The loan excludes the buyer's equity and any seller note and may include working capital, so the price is usually higher than the loan.
Which banks finance HomeTowne Studios by Red Roof acquisitions?
GBank has made the most SBA acquisition loans for HomeTowne Studios by Red Roof (6, 46% of the total). US Metro Bank, The Huntington National Bank, Everwise Credit Union follow.
What interest rate and term do HomeTowne Studios by Red Roof acquisition loans carry?
The average initial rate at approval was 7.50% (a blend of fixed and variable loans across several rate environments, so treat it as context, not a quote). The median term was 25 years.
Is a HomeTowne Studios by Red Roof resale riskier than other SBA-financed acquisitions?
Too few HomeTowne Studios by Red Roof acquisition loans are old enough to measure. The benchmark for all SBA acquisition loans is 3.5% charged off in the FY2018 to FY2021 cohort.
Where are HomeTowne Studios by Red Roof units being bought with SBA loans?
Colorado (3), Texas (2), Virginia (1), North Carolina (1), Michigan (1). State counts follow where the brand has units and where SBA lending is most active generally; see the state pages for the overall picture.
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Related
- All Hotels (except Casino Hotels) and Motels acquisitions
- Colorado acquisitions
- Texas acquisitions
- Virginia acquisitions
- GBank
- US Metro Bank
- The Huntington National Bank
- All franchise brands
Brand name as recorded by lenders in the SBA file: "HomeTowne Studios by Red Roof" (franchise code S6329). Figures are aggregates of public SBA data and are not provided or endorsed by the franchisor.